Is the Indian Government Truly Three Tiered?
The federal system was designed so that sovereignty could be shared between two tiers of government instead of a single whole unit. Amendments in the Constitution of any country to give a definite space to the local governments adds another layer to the shared sovereignty, thus furthering the cause of federalism. Unlike many countries, India, Brazil and South Africa have constitutionally and administratively made provisions for local governments and therefore qualify as three tier governments. Despite the traditional prominence of local governments and the 73rd and 74th constitutional amendment, it is still debatable if the Indian government is truly three tiered.
In August 2019, an audit into the South Delhi Municipal Corporation (SDMC) revealed irregularities of over Rs. 1600 crores. It also exposed that the municipal corporation failed to pay the salaries of many teachers and sanitation workers due to lack of funds. The CAG report (2019) listed multiple deficiencies in Mumbai’s municipal corporation’s preparations for the dampening of the destructive impacts of monsoon on the city. The inefficiencies of Indian urban local bodies is no matter of surprise to the Indian citizen. The underlying reasons behind these inefficiencies of the urban local governments can be bifurcated into two categories: (1) inherent and interpretation challenges (2) realisation/implementation challenges. The 74th amendment empowers the municipalities to become “institutions of self government” that implements schemes for economic development and social justice (and all the items under the 12th schedule). One of the foundational problems in the constitutional entrenchment of local urban governance is that local governments are enlisted under the State List (List II) in the 7th schedule and thus, it is interpreted as a subject of the state government. This nullifies the purpose of the 74th amendment of devolving some powers of the state government to the urban local bodies and enabling institutional autonomy for the same. Further, the institutional autonomy is curbed by the matters mentioned under the 12th schedule which only acts as a set of mere guidelines for the state governments to assign responsibilities to the municipalities (unlike List I and List II which are exclusive to the Centre and State respectively).
The Article 243W of the constitution that states the powers and responsibilities of the municipalities, uses ‘may’ rather than ‘shall’ while stating the endowment of authority by the State to the local governments. The interpretation of the same would be that the state government may devolve only those powers (under the 12th schedule or related to economic development and social justice) to the municipalities that it thinks is necessary (rather than all). Therefore, according to the Jawaharlal Nehru Urban Renewal Mission (JNNURM) (2011), only 8 states and one union territory had devolved all 18 functions under the 12th schedule to their respective local governments (at least functionally on paper, the ground reality may differ). As per a Janaagraha analysis in 2017, the average number of functions from the 12th schedule devolved, in 23 major cities of India are only nine. Another challenge for municipalities in India is inadequate autonomous revenue generation powers. Due to the limited provisions in the 74th amendment regarding the same, the municipalities are mostly dependent on the state legislatures to determine the taxes that they can levy or grants and loans from the state or central government. The local governments cannot levy taxes on their own. On top of that, as per a study by ICRIER, introduction of GST (which has subsumed most of the local government taxes) has led to inefficiencies on the state governments part when it comes to sharing the tax revenues with the local governments (especially the advertisement tax revenues). According to Srijana Gummalla, Commissioner, Greater Visakhapatnam Municipal Corporation, in the financial year 2019–2020, the loss in advertisement costs was around 40 crores.
Thus, the autonomy of this ‘third tier government’ depends on the interpretation and implementation of the 74th Amendment by the state legislature. Structurally, in the case of most of the municipal corporations, the mayor (the head of the council) is just a nominal head with ornamental roles while most of the executive powers of the corporation are vested with the commissioner (the bureaucratic head). Additionally, due to the inherent limitations, many times, schemes like Smart Cities, Industrial townships it becomes easier for the central or state governments to shift the powers of the local governments to other authorities (eg. Special Purpose Vehicles) for implementation purposes. Thus, despite the constitution having provisions for urban local bodies, the municipalities are mostly controlled by state governments administratively, executively and financially. However, there are some urban governance lessons that India can learn from other countries to make her three tier model more successful.
The post apartheid constitution of South Africa has provisions for protection of the autonomy of the local city governments as each tier of the government is distinctive yet interdependent. Not only are the municipalities vested with powers to independently administer and legislate under a number of important areas like transport, trade and other services but also have the freedom to raise their funds (to an extent under the supervision of the national government). Unlike India, the existence of local governments is not dependent on the national or state legislature. The constitution of South Africa provides for an indisputable foundational position for local governments with power to enforce by-laws and generate revenue. The constitutional provisions for municipalities are inclusive in such a way that the South African history of excluding certain colonies of representation and services, does not repeat itself. Most importantly, the revenue generation powers of the municipality is an original power as per the constitution (i.e. no approval is required from the federal legislature by the local governments to raise/ impose property tax, rates, fees, or surcharges). However, authorisation from national legislation for the same is an imperative. Apart from their own revenue, municipalities are also entitled to an equitable share of funds from the national government in order to provide basic services. The comparatively better performance and autonomy of South African local governments with respect to other three tier governments like India is due to the constitutional protection from the grip of national and federal legislatures. This further enables the city governments to adopt socially progressive policies in land use and housing. For example, the Johannesburg government has made it compulsory for all private development projects of 20 units or more to include at least 30% of affordable housing in the plan. This policy made Johannesburg win the Sustainable City and Human Settlements Award from the UN in 2019 as it led to the building of 6000 of such housing units in the city. However, the South African three tier government has been criticised for overburdening the municipalities with complex responsibilities without proper technical or administrative capacities to perform them. Similarly, although dotted with political interference, the Brazilian constitutional provisions for city governments originated as the ‘right of the city’ and has shown better results than India. In Brazil, municipalities have been given the same status as the members of the federation as an intermediate government. They also share the same rights and duties as the state government while implementing national policies of the central government. Each municipality is vested with the power to have its own constitution and can make their own ‘organic law’. However, the municipalities are largely dependent on the federal state for financial support. Also important subjects like environment management, social insurance, and public security are under the federal government.
Although many countries with three tier governments exhibit a multitude of issues in their governance systems. This array of issues may range from the political problem in Brazil, overburdened South African municipalities, the non transparent Swiss three tier government or the non autonomous Argentine municipal bodies. Although Indian local government system has shown the least results, in my opinion, India can not completely imitate any country’s three tier system but borrow some features from each. By far, the South African Model has proven to be the most efficient due to its executive, administrative and fiscal autonomy. Similarly, the decision and law making features of the Brazilian local governments to increase the autonomy of the municipalities have shone through a multitude of government interventions. The need of the hour is to detect fault lines within the Indian constitutional provisions that curb the independence of the urban local bodies and facilitate the devolution of powers in a more effective manner so that such bodies can imbibe the examples of similarly structured countries to implement localised solutions towards economic development and social justice successfully.
